Kmart
Kmart (sometimes stylized as K mart or kmart) is a chain of American discount department stores owned by Kabushiki Gaisha ABS. The chain purchased Sears for $11 billion in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in North America, behind Walmart and Target, with stores in the U.S., Puerto Rico, the U.S. Virgin Islands, and Guam (which houses the world's largest Kmart). History Early history S. S. Kresge, the founder of the company that would become Kmart, met variety store pioneer Frank Woolworth while working as a traveling salesman and selling to all nineteen of Woolworth's stores at the time. In 1897 Kresge invested $8,000 (equivalent to $228 thousand in 2016) saved from his job in joint ownership with his friend John McCrory of a five and dime store in Memphis, to which they added another in downtown Detroit the following year; these were the first S.S. Kresge stores. After two years of partnership, he paid McCrory $3,000 (equivalent to $85.3 thousand in 2016) and gave up his share in the Memphis store for full ownership of the Detroit store, and formed the Kresge & Wilson Company with his brother-in-law, Charles J. Wilson. In 1912, Kresge incorporated the S.S. Kresge Corporation with eighty-five stores. The company was first listed on the New York Stock Exchange on May 23, 1918. During World War I, Kresge experimented with raising the limit on prices in his stores to $1 (equivalent to $16.00 in 2016). By 1924, Kresge was worth approximately $375 million (equivalent to $5.18 billion in 2016) and owned real estate of the approximate value of $100 million. Early century growth remained brisk, with 257 stores in 1924 growing to 597 stores operating in 1929. Kresge retired as president in 1925. The Great Depression reduced profitability and resulted in store closings, with the number reduced to 682 in 1940. After the war shopping patterns changed and many customers moved out of the cities into the suburbs. The Kresge company followed them and closed and merged many urban stores so that by 1954 the total number of stores in the US had declined to 616. 1960s–1970s Under the leadership of executive Harry Cunningham, S.S. Kresge Corp. opened the first Kmart store on March 1, 1962, in Garden City, Michigan just four months before the first Walmart opened. This store is still in operation. Eighteen Kmart stores opened that year. Kmart Foods, a now-defunct chain of Kmart supermarkets, opened in that decade. Company founder Kresge died on October 18, 1966. Around the time of the opening of the first Kmart, some poorly performing S.S. Kresge stores were converted to a new "Jupiter Discount Stores" brand, which was conceived as a bare-bones, deep discount outfit. During the 1970s, Kmart put a number of competing retailers out of business. Kresge, Jupiter and Kmart stores had their main competition from other variety chains such as Zayre, Ames, Hill's and those operated by MMG-McCrory Stores (McCrory, McLellan, H.L. Green, J.J. Newberry, S.H. Kress, TG&Y, Silver's and eventually G.C. Murphy Co.). In 1977, S.S. Kresge Corporation changed its name to Kmart Corporation. 1980s In 1987, the Kmart Corporation sold its remaining Kresge and Jupiter stores in the United States to McCrory Stores, and the brands were almost entirely discontinued, although Canadian Kresge and Jupiter stores continued to operate until 1994. Kmart experimented with co-branding in 1985, when the in-store cafeteria at the store in Canton, Michigan, was converted to a Wendy's. Until November 1990, when it was passed by Walmart, Kmart was the second largest retailer in the US, after Sears. During the 1980s, the company's fortunes began to change; many of Kmart's stores were considered to be outdated and in decaying condition. In the late 1980s and into the 1990s, the corporate office shifted much of its focus from the Kmart stores to other companies it had acquired or created, such as Sports Authority, Builders Square, and Waldenbooks. The original Blue Light Special, first introduced in 1965, was retired in 1991. The company brought back the Blue Light Special in 2001, but again discontinued it in 2002. The concept was briefly revived in 2005, though Kmart at that time had no plans to use the concept long-term. Blue Light Specials were revived again in 2009 on Saturdays, offering surprise hour-long sales on selected merchandise but was discontinued again. Blue Light Specials were revived once again in November 2015. 1990–2002: New image In 1990, in an effort to update its image, Kmart introduced a new logo. It dropped the old-style italic "K" with a turquoise "mart" in favor of a red block letter K with the word "mart" written in script and contained inside the K. Kmart then began remodeling stores shortly thereafter, but most were not remodeled until the mid-1990s, and some have not been completely renovated yet. This logo was replaced in 2004 with the current logo. In the very early 1990s, Little Caesars Pizza opened its first in-store Kmart restaurants. Coincidentally, both Little Caesars and Kmart were founded in Garden City, Michigan in 1959 and 1962 respectively. In the early 1990s, Kmart also tried to reinvent itself by using the short-lived name Today's Kmart. The company also began to offer exclusive merchandise by Martha Stewart, Kathy Ireland, Jaclyn Smith, Lauren Hutton, and Thalía. Other recognizable brands included exclusively licensed merchandising of products relating to Sesame Street and Disney. Actress and television personality Rosie O'Donnell and actor/director and producer Penny Marshall became among the company's most recognized spokespersons. Kmart Super Center (Super Kmart) opened a 147,000 sq ft (13,700 m2) location in 1991 in Medina, Ohio, featuring a full-service grocery store and general merchandise. However, this location was downsized in 2011 and was one of a number of Kmarts closed in early 2012 due to dismal Christmas 2011 sales (said store is currently being converted into a Chuck E. Cheese's). The second ground-up Kmart Super Center opened in Montrose, Ohio, featuring the chain's first full-scale video rental center and a carryout Chinese menu. This location has also closed. Most Kmart Super Centers range in size from 140,000 sq ft (13,000 m2) to 190,000 sq ft (18,000 m2). Current locations feature in-house bakeries, fresh meats and seafood, and a full delicatessen. Big Kmart opened in Chicago, Illinois, on April 23, 1997. The format focuses on home fashions, children's apparel and consumables (Pantry). Most Kmart stores were remodeled to this format during the 1990s and most of them have been converted back to regular Kmart stores with the new logo introduction. The Sports Authority was acquired by Kmart in 1990 and spun off 5 years later. Kmart's profitability and sales originally peaked in 1992 and began a long decline due to competition with Walmart, Target, and Internet shopping. In 1994, Kmart closed 110 stores. Unlike its competitors Walmart and Target, it had failed to invest in computer technology to manage its supply chain. Furthermore, Kmart maintained a high dividend, which reduced the amount of money available for improving its stores. Many business analysts also faulted the corporation for failing to create a coherent brand image. 2002–09: Collapse and merger with Sears On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection under the leadership of its then-chairman Chuck Conaway and president Mark Schwartz. Conaway, who had had success building up the CVS Corporation, had accepted an offer to take the helm at Kmart along with a loan of $5 million (equivalent to $6.58 million in 2016). In a scandal similar to that involving Enron, Conaway and Schwartz were accused of misleading shareholders and other company officials about the company's financial crisis while making millions and allegedly spending the company's money on airplanes, houses, boats and other luxuries. At a conference for Kmart employees January 22, Conaway accepted "full blame" for the financial disaster. As Kmart emerged from bankruptcy, Conaway was forced to step down and was asked to pay back all the loans he had taken. After dismissing Conaway and Schwartz, Kmart closed more than 300 stores in the U.S., including all the Kmart stores in Alaska, and laid off around 34,000 workers as part of the restructuring process. Kmart introduced five prototype stores with a new logo, layout, and lime green and gray color scheme, one in White Lake Township, Michigan, a quasi-rural community near Detroit, Michigan, and four in central Illinois: (Peoria, Pekin, Morton and Washington). The new layout was touted as having wider aisles and improved selection and lighting, and the city or town's name was featured under the new Kmart logo at the front entrance. However, Kmart could not afford a full-scale rollout. The lime green prototype was abandoned for the new Kmart "orange" concept that rolled out at nine test stores throughout the U.S. While the company was in bankruptcy, a significant amount of Kmart's outstanding debt was purchased by ESL Investments; a hedge fund controlled by Edward Lampert. Lampert worked to accelerate the bankruptcy process, and on May 6, 2003 Kmart emerged from bankruptcy protection as Kmart Holdings Corporation. On June 10, 2003, it began trading on the NASDAQ with the ticker symbol KMRT with Lampert as chairman and ESL Investments controlling 53% of the new company. Lampert dismissed concerns that the smaller company would be at a disadvantage stating "The focus that a lot of people have in retail revolves around sales, but sales without profit do not allow a business to be successful in the long term." He began to improve the company's balance sheet by reducing inventory, cutting costs, and closing underperforming stores. By the fourth quarter of 2003, Kmart posted its first profitable quarter in three years, although it had returned to an operating loss until the acquisition in 2016 by Luke Sams Corporation and Japanese company Kabushiki Gaisha ABS. On November 17, 2004, Kmart announced its intention to purchase Sears. As a part of the merger, the Kmart Holdings Corporation would change its name to Sears Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands, a practice which concluded eleven years later, when Sears Holdings sold Kmart to Luke Sams and Kabushiki Gaisha ABS to focus on its core Sears business. Around this time, Kmart changed its logo from a red K with the script "mart" inside to a red block letter K with the chain's name in lowercase letters below it. Kmart's headquarters were relocated to Hoffman Estates, Illinois, and in 2012 the sprawling headquarters complex in Troy, Michigan, was acquired by the Forbes Company, which owns the nearby upscale mall, Somerset Collection. No concrete plans for redevelopment of the site have been announced. In 2005, the company began renovating some Kmart stores and converting them to the Sears Essentials format, only to change them later to Sears Grands. The lighting was updated from a 2-by-2 to a 2-by-1 pattern in all Kmart stores. Kmart started remodeling stores to the "Orange" prototype in 2006. The typical white and blue interior of the stores was changed to orange and brown, and shelf heights were lowered to create better sightlines. The remodeled stores contain an appliance department with Kenmore Appliances and most have hardware departments that sell Craftsman tools, which prior to the merger had been exclusive to Sears stores. Some auto centers left vacant by Penske after Kmart filed for bankruptcy have been converted to Sears Auto Centers. 280 stores as of 2009 have been remodeled to this new prototype. For most of these stores, Kmart retired the "Big Kmart" logo and replaced it with the current logo. In some of the larger stores the old logo is still in use. In July 2009, Sears Holdings opened its first Sears-branded appliance store inside a Kmart. The 4,000 sq ft (370 m2) store-within-a-store opened inside the former garden department of a Birmingham, Alabama, Kmart. It is two-thirds the size of the appliance department in most Sears stores, but larger than the 2,500 sq ft (230 m2) appliance department in remodeled Kmart stores. In October 2009, it was reported that Kmart and Martha Stewart Living Omnimedia failed to come to a new agreement. This came after Stewart made remarks on CNBC that her line at Kmart had deteriorated, particularly after the Sears merger. In November 2009, Kmart reported its first year-over-year sales increase of 0.5% since 2005, and only the second such increase since 2001. 2010–2016: Decline under Sears On December 27, 2011, after poor holiday sales, Sears Holdings announced that 100 to 120 of Sears/Kmart stores would close. In 2014, news reports indicated that Kmart was closing dozens of stores across the United States. Kmart's parent company Sears Holdings Corporation underwent financial distress throughout the year, sparking an unspecified number of closings to Sears and Kmart locations amid vendors and lenders concerns about its liquidity. Along with store closings, measures included the spinning off its Lands' End division, selling most of its stake in Sears Canada, issuing debt and taking on loans that cumulatively put it on track to raise $1.445 billion in cash in 2014. Howard Riefs, a company spokesman who often spoke on behalf of Kmart during the Sears ownership era, once said: "Store closures are part of a series of actions we're taking to reduce on-going expenses, adjust our asset base and accelerate the transformation of our business model." On October 10, 2014, Kmart was victim of a data breach concerning customers' credit and debit card information, perpetrated by the installation of malware on point-of-sale systems. Kmart confirmed on October 19, "Based on the forensic investigation to date, no personal information, no debit card PIN numbers, no email addresses and no social security numbers were obtained by those criminally responsible. There is also no evidence that kmart.com customers were impacted. This data breach has been contained and the malware has been removed. I sincerely apologize for any inconvenience this may cause our members and customers." In January 2015, Kmart agreed to pay $102,048 and other consideration to settle a U.S. Equal Employment Opportunity Commission disability discrimination lawsuit. According to the lawsuit, Kmart offered a job at its Hyattsville, Maryland, store to a candidate with kidney disease on dialysis. The candidate advised the hiring manager that he could not provide a urine sample for the company's mandatory pre-employment drug screening because of his medical condition, and requested a reasonable accommodation such as a blood test or other drug test that did not require a urine sample; Kmart refused to provide an alternative test and denied the candidate employment. In April 2016, Kmart announced it was closing 78 stores, which was Kmart's last ever round of closures under Sears' ownership. 2016-present: Sale to Luke Sams and ABS and road to recovery On July 29, 2016, Sears Holdings announced that it had sold Kmart to Luke Sams Corporation and Kabushiki Gaisha ABS in order for them to focus on their core Sears chain of stores. Under the new ownership by those two companies, Kmart announced plans to expand all over the USA and remodel older stores. With ABS riding high on its takeover and international expansion of Chuck E. Cheese's one month prior, Kmart opened new supermarkets in Canada, Mexico, Germany, Japan, Italy, and the United Kingdom, expanded several Kmart stores into Super Kmarts, and reopened stores in previously abandoned markets and states, such as Alaska. As of January 30, 2016, before the Luke Sams/ABS takeover, the company operated a total of 941 Kmart stores in 49 states, including the overseas territories of Guam, Puerto Rico, and the U.S. Virgin Islands, including 934 discount stores, averaging 95,000 sq ft (8,800 m2), and 7 Super Centers, averaging 170,000 sq ft (16,000 m2). Kmart has announced plans to move its headquarters back to Troy, Michigan, as well as open up an additional office building in the Japanese city of Nikko, Tochigi Prefecture. The plans for a Japanese Kmart annexe were later cancelled by KKABS, who designated an office in Dallas, Texas as Kmart's "south" headquarters. ABS also planned to improve Kmart's customer service and service methods, both of which had been declining since 2002. The rebranded store's new slogan was officially declared as "More, For Less, For You". It was conceptualised by the 10-year-old son of an ABS Broadcasting Center employee. The employee was reportedly drunk at the time of being notified about his son's new slogan - upon returning to work the next day, he formally forwarded it onto the Troy Kmart office, who went on to accept it. In December 2016, Kmart initiated a mass-renovation and modernisation of its stores in Saniel. On April 30, 2017, Kabushiki Gaisha ABS bought Kmart outright after severing its ties with the Luke Sams Corporation. On May 17, the company announced that it was considering the possible opening of Kmarts in the Noshin Republic. On June 1, 2017, it was reported that Kmart had been targeted in another cyberattack. This was confirmed by Kabushiki Gaisha ABS the next day, who immediately launched an investigation. Kenji Yukimura, head of the conglomerate, personally condemned the attack and said that his company "will work with all available authorities to locate the perpetrators and bring them to justice". As before, customers who made purchases through Kmart's website were reportedly unaffected. Category:Kabushiki Gaisha ABS Category:Supermarkets Category:Michigan Category:Japan Category:Kmart